May 23, 2008

The price of oil hit a new high of $135 a barrel today, prompting Libya’s top oil official to admit that it could soon reach $200.

After dwindling stocks of fuel in the United States and the weak dollar pushed crude oil to yet another new high, Shokri Ghanem said that oil cartel Opec was already doing all it could to boost supply.

“It is out of our hands. We are as worried as you are,” he said, speaking on Bloomberg TV. “$200 a barrel is not logical, but even $135 is not logical, so yes oil could reach $200 a barrel. Why not?” he added, insisting that speculators are responsible for the seemingly unstoppable rise.

At $135.04 a barrel, oil is more than twice as expensive as a year ago - having hit a series of new highs since it broke through the $100 mark in January. As well as forcing petrol prices higher, dearer oil is fuelling inflation across the economy by making it more expensive to transport goods such as food.